Commodity futures and options trading are two primary forms of investment that allow individuals to speculate on the price movements of commodities. Commodity futures contracts obligate buyers and sellers to trade a specific quantity of a commodity at a predetermined price within a specified time frame.
Options, on the other hand, give traders the right but not the obligation to buy or sell a commodity at a set price before a specified date. Options can be used as hedging instruments or for speculative purposes.
Commodity futures and options trading are widely used by investors due to their liquidity, diversification potential, and relatively low minimum investment requirements.